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Today’s column addresses the widespread confusion about whether filing and suspending is a necessary part of restricted applications, spousal benefit eligibility, filing at FRA or later, survivor benefit calculation and the timing of Social Security benefit check disbursement. Larry Kotlikoff is the founder and president of Economic Security Planning, a company that markets Maximize My Social Security, a Social Security benefits calculator referred to in this post.
See more Ask Larry answers here.
Ask Larry about Social Security:
Is Filing And Suspending Really Necessary To Get Social Security Spousal Benefits?
Hi Larry, My husband is at full retirement age (FRA) and could receive $2,600 a month. I am six months from FRA and could receive $1,500 per month if I file for my retirement benefits now. I’m confused about how this works. Does my husband need to file and suspend his retirement benefits until 70 in order to claims spousal benefits? What happens if he dies before 70? Will I be able to claim on his larger deferred account? Or have I lost my chance to claim benefits on his account? I hear so many different and conflicting things about whether or not restricted applications are the same as filing and suspending. My neighbor swears that it is but I just don’t know if I should trust his take on Social Security. Thanks, Miriam
Hi Miriam, Well, your skepticism is warranted. Many more people think they understand Social Security than actually do and unfortunately, the ones most in the dark are often the ones most adamant about telling others on what they supposedly must do. It’s usually best to just smile and nod and reach for the nearest shaker of salt.
First off, your husband should absolutely not file for and suspend his own retirement benefits. That would preclude him from being able to receive spousal benefits on your record. He would instead file a restricted application for only his spousal benefits and simply delay filing for his retirement benefit until later, e.g. at 70.
Filing for your own retirement benefits would not preclude you from later receiving widow’s benefits, but since your Primary Insurance Amount (PIA), which is equal to your full retirement age (FRA) retirement benefit amount, is apparently more than half of your husband’s PIA, it would almost certainly make you ineligible for any spousal benefits, though you may potentially be able to receive widow’s benefits.
If you file for your retirement benefits and your husband files for spousal benefits only on your record and he then dies before 70, you could claim a widow’s benefit equal to the rate that he would have been due on his own account if he had filed in the month of his death. You wouldn’t receive both that rate and your own benefit rate, though, just the higher of the two.
Filing for your benefits so that your husband can receive spousal benefits may be a good plan, but you and your husband may want to strongly consider using an expert Social Security benefits calculator as described in other answers or other comprehensive and precise software to explore and compare your other options in order to make sure that you’re choosing the best possible strategy. Best, Larry
Am I Eligible For Spousal Benefits?
Hi Larry, I will be 67 in July and plan on waiting till 70 for my Social Security retirement benefits. My wife just turned 67 and has been collecting her Social Security retirement benefits since she turned 62. Am I entitled to a spousal benefit of half her benefits and if so, is it retroactive for a certain amount of time? Also, will that affect the amount I receive when I turn 70? Thanks, Roy
Hi Roy, Yes, it sounds like you’d be eligible for a spousal benefit equal to 50% of your wife’s Primary Insurance Amount (PIA), which is equal to your full retirement age (FRA) retirement benefit amount. You could have filed a restricted application for just spousal benefits only when you turned 66, but you can now only claim benefits for up to 6 months retroactively.
You can then switch to your retirement benefit based on own record at 70 assuming that your own retirement benefit rate is higher than your spousal rate. And the fact that you received spousal benefits before then will have no adverse effect on your own retirement benefit rate. Note that my answer is based only on the limited information in your question, so you may want to use an expert Social Security benefits calculator, such as Maximize My Social Security or other top rated software in order to make sure that you’re choosing the optimal filing strategy. Best, Larry
Would It Be Wise For Me To Start Drawing When I Reach Age 66?
Hi Larry, I will be 66 in November. Would it be wise if I start benefits that month? And can I know how much will I get as my Social Security retirement benefit per month? Other than that, I have a small home care business providing home care. Would this business will affect my Social Security benefit? Thanks, Robyn
Hi Robyn, I can’t tell you when you should start drawing benefits because that decision largely depends on your personal circumstances and preferences. In almost every case, it comes down to whether you’d prefer to start receiving benefits sooner or delay filing in order to receive a higher permanent benefit rate.
I can tell you that you could choose to start drawing your benefits at your full retirement age of 66 regardless of how much you work and earn. And, depending on how much you earn from January through October this year, you may even be able to start drawing benefits sooner. Of course, the trade off is that you would then receive a lower monthly benefit rate than you would otherwise receive if you delayed filing. In order to receive the highest possible monthly benefit rate you would normally want to wait until 70 to start drawing your retirement benefits.
Furthermore, depending on your current and past marital history, you may have other options available to you, such as filing for benefits on the record of a current or former spouse at 66 and letting your own retirement benefit rate to grow until 70. An expert Social Security benefits calculator as described in other answers can help you explore and compare all of your options so that you can make an educated decision on when you feel it is best to start drawing your benefits. Best, Larry
Would My Wife Receive A Lesser Survivor Amount If She Takes Spousal Benefits Early?
Hi Larry, I began taking my Social Security retirement benefit at full retirement age (FRA). I’m still 66 and my wife is 61. After reviewing what she would get under the spousal benefit, I think that it would be to our benefit for her to take the reduced spousal benefit when she turns 62 in December. I began taking my benefit at my FRA. Based on the Social Security calculators, she would receive a little over $900 per month because she would be taking it early. If I died, would she receive my full benefit or a lesser amount because she took the spousal benefit earlier than her FRA? Thanks, Josh
Hi Josh, Filing for reduced spousal benefits doesn’t necessarily result in a reduced survivor benefit rate. If your wife starts drawing spousal benefits at 62 and you die, her benefit rate would depend on her age at the time of your death. If she’s at least FRA when you die, she would receive your full benefit rate, but if she’s under FRA, her survivor benefit rate would be reduced for age based on her age at the time of your death. Best, Larry
When Should I Expect To Receive My First Check?
Hi Larry. I filed and suspended in April 2016 and I’ll reach 70 in mid December. I’ve been told by SSA that I need do nothing to begin receiving my retirement benefits at 70. Assuming this is true, when should I expect to receive my first benefit check? Also, is there a way to ensure that SSA will indeed recognize that I want to end the suspension at 70? Or should I contact SSA and tell them? Thanks, Steve
Hi Steve, Assuming that Social Security processes your reinstatement in a timely manner, you should get your first payment on the 3rd Wednesday of next January. That’s when Social Security will pay benefits due for December of this year for most people whose birthdays fall on the 11th through 20th day of a month. Reinstatements at 70 are automatic if you don’t request reinstatement sooner, so it doesn’t sound like any further action of your part is required. You may want to check with Social Security to make sure they have your current bank account number on file for direct deposit, though. Best, Larry
To learn more about your Social Security options, visit Economic Security Planning, Inc.